Greater New Orleans

Insurance Commissioner Jim Donelon used a meeting Wednesday (November 20) with President Obama on health care to make the case for delays in higher flood insurance premiums.
(Lauren McGaughy, NOLA.com | The Times-Picayune)

WASHINGTON -- Louisiana Insurance Commissioner Jim Donelon on Wednesday took advantage of an Oval Office meeting on the Affordable Care Act to ask President Barack Obama about another major concern of state residents: sharply higher flood insurance premiums for some homeowners and businesses as a result of the 2012 Biggert Waters Act.

Donelon said he handed the president a document from Greater New Orleans Inc., warning that the "unintended consequences" of the law -- rate increases three, four, even 10 times the current premiums -- threaten to force people from their homes and destabilize entire neighborhoods.

"He said he would read what I handed him," Donelon said.

Wednesday's White House meeting was scheduled with Donelon, president of the National Association of Insurance Commissioners, and other states' insurance officials, to discuss the president's announcement last week that states could allow insurance companies to renew health insurance policies for 2014 that don't meet the minimum benefits requirements of the Affordable Care Act. The president said the carriers must provide clear information about consumer protections lacking in those plans and the option to purchase coverage with possible tax credits through the Affordable Care Act's exchanges.

The announcement, which could affect 93,000 Louisiana policyholders who received health coverage cancellation notices from their insurance companies, caught some of the commissioners by surprise. Some, including Donelon, questioned whether they could act based on a presidential directive, rather than new legislation from Congress.

At the closed White House meeting Wednesday, the president, according to participants, made it clear he didn't want to work around the state regulators and promised his administration's full cooperation to finding solutions to the canceled polices.

The president's announcement last week came after an estimated several million policyholders around the country received cancellation notices from companies that said the policies do not meet the benefits requirements of the new health law.

The action came after members of Congress, including some Democrats, complained that the canceled policies contradicted promises the president had made that people could keep their insurance policies and doctors after the law was implemented in 2014.

After the 50-minute meeting on Wednesday, the White House issued a statement saying that "states have different populations with unique needs, and it is up to the insurance commissioner and health insurance companies to decide which insurance products can be offered to existing customers next year."

Donelon said the president understood the issues, was "receptive" to working with the state insurance regulator, and that the meeting was "very productive."

Still, Donelon said he isn't sure how his department would respond. He scheduled a meeting Friday with his staff and others to discuss the state's options. Insurance companies are anxious for an answer "as soon as possible," he said.

Donelon, a Republican who has been critical of the Affordable Care Act, told reporters Wednesday that he is not a policy maker. "We're here to protect consumers and to enforce the law," Donelon said.

He said his options are fewer than many of his fellow state insurance commissioners. "We're one of only a handful of states with no authority over rates," Donelon said. "I don't even get information about rate increases, so from a pricing or solvency point of view, it's less of an issue for me than some of the other states."

Also attending the White House meeting were Health and Human Services Secretary Kathleen Sebelius, White House Director of the Domestic Policy Council Cecilia Munoz and the insurance commissioners of North Carolina and Connecticut. Also attending the meeting was a former Obama Senate colleague, Ben Nelson of Nebraska, now the chief executive officer of the National Association of Insurance Commissioners.

In 2010, Nelson provided a key vote for the
Affordable Care Act. He negotiated a Medicaid reimbursement plan
favorable to his state that critics of the health legislation labeled the "Cornhuster
Kickback," though the provision didn't survive the final negotiated bill.